Indonesia, Immigration, and a New Law...

It has been a while since I have bothered to write on any Indonesian laws. I continue to read them regularly, perhaps daily might be a more accurate description. I read for two reasons: to keep up-to-date and to keep my language skills up to speed. However, I figured I might jot down a few points about the new immigration law. I thought that I would do this for no other reason than having a vested interest in the subject matter. But, then again, it is 15 Chapters and 145 Articles long, I can think of a whole lot of other things that I might enjoy more now that I am writing for fun rather than income.

To say that the new Immigration Law was a long time in the making, or a long time in coming, is an understatement in the extreme. The previous immigration law was passed and enacted way back in 1992. Nevertheless, the House of Representatives (DPR) finally got their collective heads around the idea of needing to pass new legislation in this area. So, on 7 April 2011, the DPR passed the Immigration Bill into Law and the rest is history, sort of.

The new law goes some ways towards resolving a number of outstanding issues that directly impact upon foreigners living or wanting to live in Indonesia. However, there are other really critical and substantive issues that will determine whether foreigners opt to live in Indonesia that remain unaddressed, and as such unresolved. A prime example of this is property ownership in Indonesia by foreigners. This is apparently going to be addressed in separate legislation, presumably a revised agrarian law, at some later date. The "some later date" is problematic as it still creates present problems for foreigners and their Indonesian families that might not wait until some later date.

The idea that the new immigration law is solely to satisfy concerned foreigners and their agitating Indonesian spouses who lobbied for some of these changes is a furphy. The reality is that after 19 years with the same legislation while other laws and regulations were enacted and implemented around it meant that the old immigration law was no longer fit for the purpose it was originally enacted for. Furthermore, there was little point in going about the process in an ad hoc or piecemeal manner making the odd amendment here are there. Common sense dictated that the best, perhaps preferred, approach was to draft and enact a whole new law.

Yet, it must be noted that there are plenty of provisions in the new law which are pro-foreigner, particularly pro-mixed marriage families. However, once again, this is not the sole reason for the new law.

In any event, it must also be noted that the enactment of the law constitutes less than half the process. The proof of the pudding, so to speak, is in the implementing regulations. Quite clearly, the new law will require new implementing regulations in order for the new law to work and to be enforceable. If these provisions are not forthcoming, then the law will be difficult to apply and the 'guarantees' that many think the new law provides will fall by the wayside.

In fact, the statement that all current implementing regulations remain in force while they do not conflict with the new law and until such time as they are repealed and replaced does not provide any increased or enhanced certainty for those individuals that are likely to come under the full force of the law.

For example, a dilemma that presents itself is how much should foreigners be paid. The dilemma is whether foreigners as defined under the new immigration law are the equivalent of expatriates, particularly if they are being sponsored by their Indonesian spouse. The salary ranges for expatriates are set out in explicit terms in Director General of Taxation Decision No. KEP-173/PJ/2002 which requires expatriates (nationalities are listed in the decision) to be paid specific amounts in USD for certain jobs. An example, an Australia Manager in the trade business is to be paid USD 10,756 per month. Funnily enough it sets out that I should have been being paid USD 8,900 per month, but that was certainly not happening!

The guessing game here is one of whether a foreigner recruited locally in Indonesia as opposed to a foreigner recruited in their home country and brought to Indonesia are classified differently in the expatriate sense. Unfortunately, Article 61 and the elucidation is silent on the salary / wage front. However, it would certainly seem to make for an interesting discussion at the immigration office if an Indonesian spouse of limited means was seeking to sponsor a foreign spouse into Indonesia, particularly if they were looking at a small start-up business operation that might not even turn over USD 10,000 per month.

Maybe, this immigration law deal needs to be a series of posts?

Expatriate Property Ownership -- Indonesia...

The idea that expatriates (expats) may one day be able to own property in Indonesia has been tossed around for years. But, as is usually the way, nothing has become of those ideas until now. However, it would seem that there is still some ways to go before the ideas become reality. Yet, it is interesting to see that the State Department of Public Housing is making rumblings to the effect that there are moves afoot to loosen the prohibitions on expats owning Indonesian property.

The current state of affairs permits expats to take 25-year extendable (once) leases on property. There are other ways that expats go about "owning" a property in Indonesia. The most common of these is a nominee structure that involves the property being purchased by an Indonesian and then used as collateral in a loan agreement with the expat. This type of structure is one that is frequently used in Bali.

The current discussion appears to suggest that cities and special economic zones are the most likely areas to see the prohibitions eased. Nevertheless, the talk also suggests that the ownership of property in city areas is likely to be restricted to apartments. This in essence would mean that there is still likely going to be high demand for the nominee structure to remain if expats are more interested in a house as opposed to an apartment.

Yet, this is definitely a move in the right direction.

I guess time will tell whether there will be a full liberalization of the real estate sector that would allow foreigners to own property, and as much of it as they can afford. Maybe if the rules do change I might even be tempted to get into the market myself.

Learning the Lingo -- Indonesian

Language is an important feature of Indonesia and what it means to be Indonesian. So, it is hardly surprising that there is a movement to codify this with a law on language.

The Bill on Language has been in and out of favour for some time as other pieces of legislation deemed either more important or more urgent being considered and enacted in preference to it. Nevertheless, the bill has never totally gone off the radar and a recent workshop on the bill sort to develop a more detailed discourse on the needs for a law on language. The bill specifically regulates the use of Indonesian and other languages.

However, the most interesting issues relate to how the bill mandates the use of Indonesian in all official representations of state and the requirements for all foreigners seeking to work and live in Indonesia to have a standardized level of Indonesian language skills.

The bill in most respects is not all that controversial and even the points of interest noted above are really not controversial in the sense that they are likely to result in deadlock or sink the bill in the consultation and discussion phases. The idea that the Head of State must use Bahasa Indonesia in all formal engagements is likely to resonate with ordinary Indonesians. Furthermore, Indonesian, and in particular proper and correct Indonesian, is a source of pride for Indonesians. Although in a practical sense it is probably important that the Head of State be able to speak English in order to have the option of presenting in English where practical and necessary.

The idea that foreigners must pass an Indonesian competency exam is reasonable and in most cases reciprocal. Indonesians are generally required to speak, read, and write at an acceptable level of English in order to work or study overseas. Therefore, it would seem to make good sense for Indonesia to require the same level of competency in Indonesian for those foreigners wanting to live and work in Indonesia.

It is conceivable that some people will see this bill as a threat to the ease of completing the functions of State and in doing business in Indonesia. However, the bill still has plenty of hard yards to hoe before it reaches the House of Representatives (DPR) and is put into the Committee process leading to a plenary vote.

The bill seems to be making progress however it is currently not a priority. The draft is current as of August 2008.

Provisions
The Bill requires the use of Indonesian in all public and private work environments. Article 11 even requires that all brand names, buildings, advertisements, and company names be in Indonesian.

This is not the first time that measures such as these have been proposed or used. Over the last decade there have been various attempts to compel the use of Indonesian. The most oft cited example of this is the case involving Bakery Holland. Bakery Holland was forced to Indonesianize its corporate name, the solution was simple - Bakeri Hollan, neither of which would seem to be proper and correct Indonesian or for that matter proper and correct words in any language.

Cultural and Ethnic Diversity
The Bill simply acknowledges the cultural and ethnic diversity that is Indonesia but would seem to restrict the use of regional languages to very limited situations. The bill permits the use of foreign languages only in forums that are international in nature and substance. There is a need for a national language. However, there remains a question as to whether this must come at the expense of regional languages and dialects. It must be noted that breaches of the provisions will result in administrative sanctions.

Arguments that the restrictions placed on the use of regional languages do not reflect the spirit of ‘unity in diversity’ seem to ignore the fact that there are no express provisions outlawing the use of regional languages and dialects. To the contrary, regional languages are permitted including how these languages are to be maintained is clear based on Article 27. However, considering the emphasis on ensuring the development of Indonesian for all spheres of use the issue will be one of how the regions will fund and develop the maintenance of their regional languages where there may just well be an overwhelming emphasis on ensuring meeting mandated standards of Indonesian.

Nevertheless, proponents of the bill note that the idea of Indonesia having a national language is something that is mandated not only in the Constitution but from a much earlier time, specifically the 1928 Youth Pledge.

Foreigners
The Bill requires all foreigners working in Indonesia to be proficient in the Indonesian language. In principle this is not an ill-conceived demand, the question is the workability of the proposal and the uniform standards that it will require to be put into place. From a business and investment perspective, all future labor and human resources hiring decisions as they relate to foreign staff will require that the prospective expatriate staff meet the required levels of proficiency.

For example, before a language school could hire an expatriate native speaker language teacher that teacher must first be proficient in Indonesian before they could be offered the position. It is accepted that communication between the expatriate and the local staff would be greatly enhanced if the expatriate knew Indonesian however the knowledge of Indonesian is not critical to the ability of the expatriate to perform their employment functions.

That said, it is important that there is a legal requirement for the transfer of knowledge from the expatriate to the Indonesian counterpart. Therefore, it is reasonable to assume that this transfer of knowledge would be greatly enhanced if the expatriate could impart that knowledge in both Indonesian and the foreign language. The Labor Law and the implementing regulations envisage expatriate staff provided expertise, imparting that knowledge to local staff, and then having that local staff take over the role of the expatriate.

Indonesian Proficiency Tests
Foreigners
The Bill mandates that all expatriate employees and foreign students will have to have the requisite knowledge of Indonesian before being permitted to work or study in Indonesia. This will require them to sit and pass the Indonesian Proficiency Test (Ujian Kemampuan Bahasa Indonesia / UKBI) however what score they might have to achieve to 'pass' has not yet been set.

It remains unclear whether the test will be required for expatriate residents of Indonesian who are not working and studying, particularly for the ever-expanding group of expatriates retiring to the warmer climes and quieter surrounds of Bali among other Indonesian locales.

Indonesians
Just so that expatriates do not think they are being unfairly singled out for language proficiency tests, all Indonesian public officials and State employees will have to possess the requisite knowledge levels of proper and correct Indonesian - this may seem easy enough - but anyone watching local news bulletins with interviews with public officials will note that perhaps this is going to be a challenge for some Indonesians as well.

Official Representations
The Bill stipulates that for Indonesians that all speeches in written or oral form presented in Indonesia or abroad in an official capacity must be done in proper and correct Indonesian. The effect, the President in any speech that he makes whether it be, opening an international conference in Indonesia or making a speech addressing the General Assembly of the United Nations, these speeches must be in Indonesian.

As noted earlier international conferences in Indonesia may use a foreign language as the lingua franca yet it remains unclear whether an Indonesian official opening the conference would be permitted to use the foreign language to open the conference, particularly in light of Article 13.

On face value this seems an excessive requirement. This requirement might be directly linked to the controversy over a former Miss Indonesia's participation in an international pageant where she referred to Indonesia as being “a beautiful city”, an honest mistake or otherwise; even native speakers can make mistakes in their own language. Or it might simply be that Indonesian is a source of national pride and as such must be used at every possible opportunity.

Sanctions
The sanctions for breach of the provisions include written and verbal warnings, administrative fines, withholding and cancellation of permits, and the suspension of services until compliance is achieved. The impacts are obvious in regard to investment and foreigners. Nevertheless, one of the other aims of the Bill is to redress many Indonesian problems, such as a weakening of national pride and patriotism, which are considered to result in the deterioration in the use of proper Indonesian.

Enforcement
Yet, it would seem that the practicalities of regulating language use in the private and public spheres is only going to increase the red tape and bureaucracy in an already overburdened, over-bureaucratic State apparatus, which lead to claims at the recent seminar on the Bill that it was nothing more than a paper tiger or an unloaded gun.

Nevertheless, it must also be considered, although not explicitly stated, that Article 19 of the Bill would imply that the Government has an obligation to enforce the provisions and consequently to ensure compliance.

Publishing
Finally, the use of Indonesian is compulsory in the writing and publication of scientific papers and articles in the mass media, and films. Taking this to the logical extreme the inference is that all non-Indonesian language material must be translated or dubbed into Indonesian for local publication and dissemination.

The issue here is not the intent but rather the enforceability of such provisions. Presumably the Indonesian language requirement does not apply to Indonesian scientists and academics intending to publish material about Indonesia in foreign publications, once again this is an enforceability issue. Another example would be subscription based television programming; do the provisions entail that all programming content, free-to-air and subscription based, have to be in Indonesian.

Services Provided in Languages Other Than Indonesian
Another interesting question that the Bill or subsequent Government Regulations will need to address, perhaps in the Elucidation to the law, is the status of Indonesian produced English language news services – will they be required to include subtitles?

Conclusion

In conclusion, the intent of the Bill is a valid one, the promotion and development of the National Language. However, the codification of this intent is problematic and this piece has highlighted but a few of these, of particular concern is the enforcement of the provisions.

This increased bureaucracy and the ever-expanding intrusion of Government into the private corporate and private spheres is perhaps an issue of concern. This is particularly the case where the respective post-Soeharto Governments of B.J. Habibe, Abdurrahman Wahid, Megawati, and currently Susilo Bambang Yudhyono have sort to distance themselves from the authoritarian nature of the past through the promotion and emphasis on good corporate governance and the human rights and dignity of individuals to be free from excessive intrusion by the Government - the emphasis here is on smaller, more efficient government rather than an unending expansion of the big government of the past.

ExxonMobil and People Smuggling

The Department of Labor and Transmigration has singled out ExxonMobil and in particular its subsidiary Mobil Cepu Ltd, for being responsible for human trafficking. Well, the Department says smuggling because Mobil Cepu allegedly has expatriates employed who have not fulfilled the necessary immigration and presumably labor requirements.

The Deputy Head of the Regional Departmental office is convinced that an investigation into illegal expatriate workers has turned up evidence that there are in fact expatriates working on Mobil Cepu's East Java gas fields.

The investigation was sparked by a denial by Mobil Cepu for a joint team to enter the mining site. The Deputy Head, Setiadjit, was also a little upset that the joint team was not allowed to raid the houses of the expatriates as well.

This has all the hallmarks of a "he said, she said" shakedown. Setiadjit is of the opinion that the parent companies are ultimately responsible for the actions of their subsidiaries and it is ExxonMobil that needs to ensure compliance and if compliance does not occur then it is ExxonMobil that must be responsible for any violations.

This has ended with the Labor and Transmigration Regional office jumping up and down and threatening to lodge a police report if the relevant paperwork is not handed over. The deadline is 13 October 2008.

It is certain to get a little more interesting yet as ExxonMobil has stepped into the fray, just like Setiadjit demanded. A spokesperson for ExxonMobil has stated unequivocally that they have complied with all prevailing laws and regulations and that the relevant labor authorities are already in possession of the required documents.

If this develops into a story I will post a postscript to this entry.

Does Rudd's Vision Change Australian Policy on RI?

This is an opinion piece from today's Jakarta Post. I re-post it here for the reason that the writer is a personal friend and one of the people that provided me with my education on Indonesia. Despite our often differences in opinion, he is one of the few people I trust to give me the low down on why my opinions are wrong or misguided!

It is also interesting to see how a long-term expatriate Indonesian views the way Australia deals with its nearest and biggest neighbour.

Eko Waluyo , Sydney Thu, 06/12/2008 10:18 AM Opinion

The visit of Australian Prime Minister Kevin Rudd to Indonesia from June 12 to 14, along with his trip to Japan, aims to advance Australia's economic and security interests. His ambition to create an Asia-Pacific community by 2020 is a sign Australian foreign policy will focus on engaging Asian countries.

Whether his vision will be a success or not, he is willing to bury Howard's idea of being the U.S. deputy sheriff in the region. Rudd wants to reassure the Asian countries they can be comfortable with Canberra under Labor.

Paul Keating said in 1994 that "no country is more important to Australia than Indonesia", where economic and security cooperation was the focus of bilateral cooperation rather than human rights and democracy issues. As a result, his dictum could be translated as "no country is more important to Australia than Soeharto's regime".

Indonesia today is much different than when Keating was in office. National and local elections are held regularly and the military's role in sociopolitical life has been eliminated in certain cases. Keating's road map to cement the relationship with Indonesia expired after Soeharto's departure; however, the Rudd government should take the social and political transformation in Indonesia as the foundation to build a genuine relationship.

The Labor government in Canberra now has the potential to develop a bilateral relationship with Indonesia by learning from Keating's and Howard's paths, with Canberra possibly playing a role to strengthen democratic processes and human rights.

There are several places Rudd's government can play a significant role. Issues that need to be addressed when Rudd meets President Susilo Bambang Yudhoyono include whether Australian aid can be effective to eradicate poverty in Indonesia and create equal rights for citizens, how the half-heartedness of Jakarta to address the problem in Papua has created mistrust among Papuans toward Jakarta, and how to support security sector reform, particularly among the Indonesian Military and the National Police.

The culture of egalitarianism within democratic systems like Australia exists because of the country's social security system among citizens. The consequence of the 1998 economic crisis created unemployment and widespread poverty in Indonesia. There are 37.2 million people living in poverty without basic income and other social securities. Despite the economic growth of 6.2 percent, there is a big shortage of jobs. Human rights must include access to employment and economic security.

Kevin Rudd has promised to increase Australia's overseas aid program from 0.3 percent of GDP to 0.5 percent by 2015 as Canberra's part in the global movement against poverty. If aid is subordinate to foreign policy, it's hard to believe aid will effectively address these substantial problems.

Indonesia is among the biggest recipients of Australian aid, but this program is more about cementing intergovernmental relations (especially after the 1999 rupture over now Timor Leste) and most aid programs are delivered by Australian businesses (called "boomerang aid" by critics).

Several regencies in Indonesia (Jembrana in Bali, Makassar in South Sulawesi, Kupang in East Nusa Tenggara, Blitar in East Java and more) have been implementing social programs in health and education. Australian aid should support similar programs in other regencies.

When Jakarta introduced the 2001 law on Papuan special autonomy, the message was clear that education, health and unemployment would be addressed. In addition there would no longer be human rights abuses and past abuses would be addressed to destroy the culture of military impunity.

But the presence of so many troops in the province has only created conflict with local communities, and as a result Papuans do not have the power to exercise their democratic rights. Health and education infrastructure does not meet their requirements. In addition Papua is no longer a major issue in the eyes of Jakarta's ruling political elite and special autonomy is not fully implemented as a consequence.

Kevin Rudd's genuine commitment to support special autonomy for Papua should be proved by addressing the Papuan issue with his Indonesian counterpart.

The transformation from three decades of authoritarian role (where the military was able to control social and political life) to democratic transparency is an impressive change in 10 years. Security sector reform is part of the political agenda for further democratization, through legal regulations to put the military under democratic institutions and turn the police into civilians. However, security sector reform is just beginning, and here international cooperation can play a role.

Rudd's first salvo in foreign policy was to sign the Kyoto Protocol and promise to withdraw Australian troops from Iraq. The most crucial aspect is whether he is willing to differ with Washington's policy. Is he also willing to change past patterns of supporting the Indonesian armed forces regardless of human rights concerns, the pattern seen under Keating and Howard?

Howard's legacy on security cooperation with Indonesia needs to be evaluated. Especially in an era of military reform it is inappropriate if Australian forces train with Kopassus. In addition, the police cooperation should go beyond counterterrorism because the police need a new democratic paradigm.

Kevin Rudd's vision to promote an Asia-Pacific Community should not only be about economic and security issues that especially benefit Australia but also about economic security and human rights in Asia. In regards to Indonesia, the Asia-Pacific community should articulate the reform of the security sector.

The writer is a program coordinator of Indonesian Solidarity, a nonprofit organization that support human rights in Indonesia and Sydney -- Australia

Industrial Relations in Indonesia - The Good, The Bad, and The Ugly

The Industrial Relations Court (Pengadilan Hubungan Industrial / PHI) located in the Central Jakarta District Court has handed down an interesting decision that has implications for the employment of expatriates across the board. This particular dispute arose between a number of teachers who believe that they have been unfairly, arbitrarily, and unilaterally dismissed contrary to the provisions enshrined in the Labor Law (Law No. 13 of 2003) to protect them.

In a blow to labor of all forms in Indonesia the PHI has sided with the employers in this case. Why is it a blow? The decision expands the previous interpretations of the provisions of the Labor Law in a manner which clearly favors employers over their employees. This brings into question whether employees have any real employment security once an employer decides to terminate their services for any reason, real or imagined, in a unilateral manner.

The Labor Law is presumably to enhance and protect the interests of both parties in this situation and to ensure this occurs a limited interpretation of the provisions must be applied. Limited in this sense refers to interpretations that comply not only with the spirit of the provisions but with the wording of those provisions as well.

An interesting aside to this case is that there was a previous mediated decision formulated by the Labor and Transmigration Office of West Jakarta that indicates that the Respondents in this case were in breach of the provisions of the law. This mediated decision made an award to the Plaintiffs. However, there was a stipulation that if either party disagreed with the award then they could proceed with an action in the PHI.

In this case the Respondents chose this option. It is worth noting that the PHI did not give any consideration to the mediated settlement decision of the Labor and Transmigration office despite the document being entered into evidence.

Of most interest to employers in this decision is that Specified Term Employment Contracts (Perjanjian Kerja Waktu Tertentu / PKWT) cannot morph into Unspecified Term Employment Contract (Perjanjian Kerja Waktu Tidak Tertentu / PKWTT) even where the employer fails to renew the expired PKWT. The reasoning offered by the PHI was that the Labor Law requires expatriates to be on PKWT.

The literal reasoning and application of the provision above flies in the face of the creative interpretation offered by the PHI with regard to the language of PKWTs. The Labor Law at Article 57(1) seems to explicitly suggest that a PKWT must be in Indonesian. One of the claims of the Plaintiffs was that the only contracts they had were in English. However, the PHI held that the contracts in English fulfilled the necessary requirements under the law.

For employees it is important that they understand that once they have been terminated that the “clock is ticking”. This means that the prevailing laws and regulations only allow for a certain amount of time to elapse before any claim must be lodged. It is important to note that the PHI made specific reference to matters that were submitted outside of the stipulated time frame.

However, in a win for employees, the PHI held that if an individual was engaged into employment after the mandatory retirement age then an employer could not rely then on Article 167 to terminate the employee because they had entered mandatory retirement age.

The decision was determined on 8 April 2008 and read out in open court on 17 April 2008.

The Plaintiffs have already commenced the process of appeal. A reading of the judgment suggests that there was a considerably large amount of "evidence" that did not make it into the record of evidence and an equally large amount of uncontested evidence submitted by the Respondents in the case.

Perhaps an impartial review by lawyers not connected to the case needs to be part of the appeal strategy of the Plaintiffs in this case.

This is not the first case where teachers have been unilaterally dismissed by their employers. In a previous case that was judged at the PHI the decision was in favor of the teacher.

Karaoke Singers

Anyone looking to employ karaoke singers should know that there are some new rules in place courtesy of the Minister of Labor and Transmigration and Regulation No. PER.02/MEN/III/2008.

The new rules will require an employer to have the written permission of the Director for the Control of Exploitation of Foreign Labor. This permission will only be granted where the employer submits a business license for a business that owns karaoke facilities, a valid plan for the exploitation of the foreign labor in question, the payment of any compensation fees, a copy of an insurance policy, and a work contract.

The maximum period of time a permit will be granted for is six months and it cannot be renewed.

For every foreign karaoke specialist employed, the employer is under an obligation to employ five Indonesian karaoke specialists.

Perhaps this does not interest any of my loyal readers as you are probably not big karaoke fans! But if you are then at least now you will have a discussion starter next time you are enjoying the talents of either a foreign or Indonesian karaoke specialist!

Indonesia and Foreign Labor

There are lots of expatriates in Indonesia. However, this is just an impression as I have not yet bothered to enquire of the Indonesian immigration services as to exact numbers but I will over the next couple of days! There are probably many expats who have a horror or perhaps even a funny story related to the trials and tribulations that are working in Indonesia and dealing with Indonesian immigration officials.

However, some of these stories probably relate to the incompetent businesses and companies that often employ them and as often seek to circumvent the applicable rules such as paying the USD 100 per month foreigner tax or employing someone in a different capacity to that which was claimed in the application process.

A recent decision from the Industrial Relations Court had opportunity to canvass some of these issues and the decision that was handed-down apparently does very little to clarify the position of expatriate labor in Indonesia but in fact makes any foreigner employed in Indonesia susceptible to the strong-armed tactics of employers. The applicant in this case is a foreigner and the claim was that more than 30 violations of the Indonesian Employment Law (Law No. 13 of 2003) were committed in the recruiting, hiring, and subsequent firing of this person.

As I said, I have not seen the decision yet and will not comment definitively until I have. But if the grapevine is true to its word, and it usually is, then this is a story I will post more on when I have it. Apparently, the decision is going to be appealed so perhaps there will be more wide-spread media coverage of the nitty gritty details for us to peruse.